Discuss the effect of such a matching program on communities

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Many matching grant programs specify that the federal government matches on a dollar-for-dollar basis local expenditures up to some particular maximum. Draw the budget constraint between private goods and local public goods facing a community of identical individuals. Discuss the effect of such a matching program on communities that do not go to the maximum. Discuss the effect on communities that go beyond the maximum.

Reference no: EM131431255

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